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President to President

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President to President
Molly Corbett Broad's weekly email newsletter to higher education leaders.

President to President, March 7-11, 2011

Vol. 12, No. 10

  • Congress Holds Key Hearings on Higher Education
  • Budget Battle Continues
  • Patent Reform Passes Senate
  • ACE Fellows Hold Washington Seminars
  • ACE Wraps Up Successful 93rd Annual Meeting

It was a very busy week in Washington: the partisan debate over the current fiscal year budget continued, Congress held two important higher education hearings, the Senate approved major legislation to overhaul the nation's patent laws, and ACE completed a very successful 93rd Annual Meeting.

Two major congressional hearings focused on higher education this week.

The first hearing was held March 10 before the Senate Health Education, Labor and Pensions (HELP) Committee. Chaired by Sen. Tom Harkin (D-IA), the hearing largely focused on the rapid growth of Bridgepoint Education, Inc. In an extended opening statement, Harkin described the process by which Bridgepoint transformed Franciscan University of the Plains, a small, struggling Iowa college, into Ashford University, an online school with an enrollment of roughly 80,000 students.

Harkin was particularly critical of the company's rapid growth (its profits jumped from $33 million in 2008 to $216 million in 2010), low rates of student persistence and graduation and its heavy reliance on federal student aid. He repeatedly referred to the college as a "scam." Because the Department of Education has not yet finalized a recent audit of the company, Bridgepoint Chief Executive Officer Andrew Clark, on advice of lawyers, did not testify or attend. Harkin elected not to use his subpoena power to compel Bridgepoint to appear.

Without Bridgepoint's participation, much of the hearing focused on the efforts of regional accrediting agencies and federal and state government to oversee institutions. Harkin was especially critical of the Higher Learning Commission of the North Central Association of Colleges and Schools (HLC) for its decision to allow Bridgepoint to maintain Franciscan's accreditation when assuming control, and for the commission's failure to carefully monitor the institution's subsequent growth and academic performance. HLC President Sylvia Manning made clear that her agency (which she did not join until 2008) was unprepared for the rapid growth of Bridgepoint but underscored that changes since her arrival at HLC would prevent a recurrence. She pointed to two recent cases—Rochester College (MI) and Dana College (NE)—where the accreditor blocked efforts to transform struggling nonprofit colleges into for-profit institutions.

Despite Dr. Manning's strong performance, it was not a good day for accreditation. Several members of the committee—most notably and emphatically Harkin—made clear that they had serious reservations about the ability of accreditors to monitor large, for-profit institutions.

This is the fourth hearing Harkin has conducted on for-profit institutions and, as before, it was politically contentious. Sen. Mike Enzi (R-WY), the ranking Republican on the Senate HELP Committee, called them "the most biased and poorly executed hearings in my nearly 15 years in the Senate," and walked out immediately after speaking.

The second hearing of the week I'll note here was held this morning in the House Education and Workforce Committee's Subcommittee on Higher Education and Workforce Training, which is chaired by Rep. Virginia Foxx (R-NC). The Committee called the hearing expressly to consider the effects of the Department of Education (ED)'s new credit hour and state authorization regulations. ED Inspector General Kathleen Tighe testified about the origins of the decision to create a federal definition of an academic credit hour. Other witnesses included John Ebersole, president of Excelsior College (NY), G. Blair Dowden, president of Huntington University (IN), and Ralph Wolff, president of the Western Association of Schools and Colleges.

Rep. Foxx opened the hearing by referencing a letter we sent to her, Ranking Member Ruben Hinojosa (D-TX) and ED Secretary Arne Duncan this week on behalf of roughly 70 organizations, requesting a one-year extension in the July 1, 2011 effective date. While the hearing had some welcome bipartisan overtones, it nonetheless revealed some basic differences in the way the two parties view the matter of federal regulations in general, and these in particular. Foxx, for example, expressed concern that although compliance with these regulations is necessary for participation in Title IV student aid programs, "colleges fear they will have to check in with the federal government before creating courses that are eligible for such funding," while Hinojosa asserted that "we must have consistent measures of credit hour."

During the hearing, Rep. Rob Andrews (D-NJ) asked Tighe how widespread the practice of over-awarding credit is among institutions. She responded that while she was certain there are institutions that over-award credit, she didn't have evidence of a systemic problem. The hearing concluded with Rep. Susan Davis (D-CA) asking the panel what they thought would be needed in order for institutions to comply with the regulations, to which John Ebersole responded (in regard to state authorization): "there is no way we can be in compliance. The states aren't in a position to accept our applications, will not be in a position to review them or act on them; some states have program reviews which require stacks and stacks of documents covering every single course and every single faculty member in those programs. It took us 400 hours in one state just to register two programs. To think that 3,000 institutions with hundreds and hundreds of programs will be able to register them in these states is, frankly, just not realistic."

This is one in a series of hearings the subcommittee and full committee are holding. Next Thursday, the committee will conduct a hearing on the gainful employment regulation, followed by two field hearings on "The Role of Higher Education in Job Growth and Development." The first of those will be in Wikes-Barre, PA, on March 21, and the second will be held in Utica, NY, on March 22.

As you know, the federal government has not yet approved a budget for the current fiscal year (2011) that began on Oct. 1, 2010. Since the end of fiscal year 2010, Congress has been funding the government through a series of short-term spending bills called continuing resolutions.

This week the Senate considered—and rejected—two very different spending plans that would have funded the federal government through the rest of the fiscal year. The first was HR 1, the spending plan approved by the House Feb. 19 that would have cut federal spending roughly $60 billion below the fiscal year 2010 level. This measure—which would have reduced the maximum Pell grant by $845 for the coming fiscal year and slashed NIH funding by $1.6 billion—was rejected on a 44-56 vote. Senate Democrats advanced an alternative proposal that would have reduced funding by just $10.5 billion. This measure was defeated 42-58. Since 60 votes were required for passage, neither measure came close to attracting the necessary support.

The votes make clear the Senate will approve budget cuts somewhere between the amounts laid out in the two defeated amendments. However, what programs will be reduced and by how much remains totally uncertain. Another unknown is whether the House of Representatives will accept spending cuts that are more modest than they proposed in HR 1. In short, things are not much clearer than they were a week ago.

The current CR will expire on Friday March 18. Congress must approve another spending measure by that date or the federal government will close. In all likelihood, Congress will approve at least one more short-term spending bill while it continues to struggle toward a longer term solution. Late Friday, House Appropriations Chairman Hal Rogers (R-KY) introduced a three-week CR. While it cuts $6 billion from the FY10 spending levels, it does not appear to reduce funding for any major higher education or scientific research programs.

Until Congress finalizes spending for the current fiscal year, it will be almost impossible to begin consideration of the President's FY 2012 spending plan (for the fiscal year starting October 1, 2011). Waiting in the wings is another major spending measure—the extension of the federal debt ceiling—that must be addressed sometime this spring or early summer.

The bottom line is that we will continue to see congressional attention focus on government spending. The time consumed in passing a series of short-term spending bills will make it hard for Congress to find time to consider other legislation.

On March 8th, the Senate approved the America Invents Act (S. 23), a major reform of the nation's patent laws. The overwhelming 95-5 vote indicates the strong level of bipartisan support for the much-needed and long-overdue legislation. The major higher education organizations strongly supported this measure.

The Senate bill seeks to align the American patent system with our major trading partners, reduce patent litigation and speed the pace of patent reviews. President Obama issued a strong statement of support for the Senate bill and House Judiciary Committee Chairman Lamar Smith (R-TX) also praised Senate approval of the legislation. He pledged to introduce a similar measure later this month.

Patent reform has been in the works for several years. The early action by the Senate accompanied by support from both the White House and Chairman Smith suggest we may finally see a measure enacted into law in this Congress.

The ACE Fellows program held its mid-year meeting this week in connection with our Annual Meeting in Washington, DC. One of the highlights was the Fellows meeting with Rep. Virginia Foxx (R-NC), chair of the House Subcommittee on Postsecondary Education, as well as Rep. Tim Bishop (D-NY). Both members met with the Fellows in the evening—long after the House had concluded its work for the day. This was a terrific experience for the Fellows and provides another indication of the richness of this program. I am deeply grateful to Foxx, with whom I worked as president of the University of North Carolina, and Bishop for finding the time to talk to the Fellows about higher education policy.

Finally, I very much enjoyed seeing and hearing from so many of you at ACE's 93rd Annual Meeting this week.

It is always invigorating to discuss with colleagues and friends so many of the compelling issues we encounter as higher education leaders. If you made the journey to Washington, DC, I hope you returned home safely and with new tools and ideas about how to "reach higher" on your own campus.

Among the highlights of the meeting was Yale University (CT) President Richard C. Levin's opening Atwell lecture, in which he discussed ways to inspire our leaders and the public to support the vital work of American higher education. You can download a PDF of his speech, "Why Colleges and Universities Matter," here.

I found our other plenary speakers to be dynamic and thought-provoking as well. Bob Johansen, distinguished fellow at the Institute for the Future, delivered an intriguing forecast for the next 10 years. A panel of experts, moderated by EDUCAUSE CEO and President Diana G. Oblinger, addressed the challenges we share in improving completion rates.

Clayton Christiansen, professor of business administration at Harvard Business School, delivered the message that it is time for colleges and universities to take stock of their relevance. Jonathan R. Cole and a panel that included University System of Maryland Chancellor William E. Kirwan, The Pennsylvania State University President Graham Spanier, and University of Chicago Provost Thomas F. Rosenbaum expressed concern for the future of state universities, particularly research institutions, given the current economic climate. Finally, Department of Labor Assistant Secretary Raymond Jefferson, in an emotional and personal address, reminded us of the importance of supporting our nation's veterans as they transition from military to civilian lives.

We also honored several of our colleagues for their leadership in higher education. Among them were Susan L. Perry, a pioneer in the integration of computing and library services, who received the Donna Shavlik Award; Towson University (MD) President Robert Caret, ACE Council of Fellows/Fidelity Investments Mentor Award winner; University of Maryland, Baltimore County President Freeman A. Hrabowski III, who was honored by the TIAA-CREF Institute with the Theodore M. Hesburgh Award for Leadership Excellence; and Syracuse University (NY) Chancellor Nancy Cantor, recipient of this year's Reginald Wilson Diversity Leadership Award.

During the meeting, we thanked outgoing Board Chairman John Sexton, president of New York University, for his service to ACE and welcomed our new chair, Eduardo J. Padrón, president of Miami Dade College (FL). We also elected Vice Chair Joseph E. Aoun, president of Northeastern University (MA).

I look forward to seeing all of you in March 2012 for ACE's 94th Annual Meeting in Los Angeles. For photos and news about this year's meeting, visit ACE's website.

Molly Corbett Broad
President of ACE